Halliburton Contractors Denied Insurance Benefits by David Phinney, Special to CorpWatchMay 24th, 2005

Mark Baltazar was between jobs operating heavy construction equipment when he heard American contractors in Iraq were paying $84,000 a year for his skills.

Because the job would be outside the United States, it sounded all the sweeter. The money would be tax-free and he figured he’d be making more than enough to help buy his family a new home back in Texas.

One month and three weeks after Baltazar started work with Halliburton subsidiary, Kellogg, Brown & Root (KBR), the largest military contractor in Iraq, a suicide bomber near Mosul blew those plans to smithereens.

On Dec. 21, 2004, the 32-year-old father of five had just finished lunch in the sprawling KBR mess tent at Camp Merez where hundreds of U.S. troops, Iraqi security forces and U.S. civilian contractors were eating. The bomber walked in unseen and then triggered one of the bloodiest attacks on U.S. forces since the invasion began. The explosion swept through the tent, hurled Baltazar into the air and sent him crashing down over the back of a chair.

The blast left 69 people wounded, including Balthazar and 24 other civilian contractors. Seven of the 22 left dead were KBR employees and subcontractors. One was a co-worker of Baltazar's who had just left the table to get some ice cream. It was the last time Baltazar saw him alive.

Battling for Insurance Benefits

Now, six months later, like hundreds of other civilian workers injured in Iraq, Baltazar is still battling with KBR's insurance adjusters as he nurses the back injury and other wounds from the blast.

Instead of saving for a new home, Baltazar finds himself worse off then he was when he left for Iraq. He's jobless because of his injuries, living in a Houston apartment, and relying on a $368 disability check every two weeks.

"You make more money working at McDonald's," says Baltazar, who was raised in Odessa, Texas and moved to Houston 14 years ago.

And he continues to be denied full insurance coverage worth more than $1,000 a week as outlined in the Defense Base Act (DBA), according to his lawyer, Gary Pitts, who says the money would go a long way to supporting Baltazar and his family.

The DBA requires businesses working overseas under U.S. funded contracts to provide insurance coverage for injuries and disabilities of all employees. Subcontractors are responsible for providing similar coverage to their workers. Baltazar's projected DBA amount is a sum based on the comparative annual income he would be making if he hadn't been injured.

Immediately after the bombing, KBR medics x-rayed Baltazar's back. They gave him morphine and said he would be fine. But after spending two days resting in his trailer, Balthazar recalls, he told his supervisors he wanted medical leave to go back to the United States and see a doctor of his choice.

"I wanted to return to work after some medical leave," Baltazar explains. "They said my injuries weren't severe enough to send me home, so I either had to stay in Iraq or quit."

Since January, he has been getting spinal injections and visiting a physical therapist three times a week to help ease the pain of the back injury he sustained when he landed on the chair. He also suffers from hearing loss and blurry eyesight because of the blast and receives psychological counseling for his shell shock -- known as post-traumatic stress disorder.

Shell Shocked Scars

Commonly known as PTSD, post-traumatic stress disorder often appears as a temporary psychological condition, but it can also last a lifetime. Symptoms include major depression and anxiety that can lead to suicidal behavior. The disorder haunts an estimated 15 to 17 percent of soldiers returning from Iraq, according to a study published by the New England Journal of Medicine in their summer 2004 issue. The condition is also currently affecting an unknown number of contractors who witnessed the horrors of war firsthand.

Little data is available on just how widespread the problem may be among civilian workers. According to Dr. Charles Figley, Director of the Psychological Stress Research Program at Florida State University and one of the country's most prominent PTSD experts, the number of contractors suffering from the disorder will likely remain an estimate.

"No one is counting, no one is noticing and no one cares," said Figley, a former Marine and Vietnam veteran who believes that the risks contractors face are the main reason that many of them earn high salaries.

Figley predicts that a PTSD study would document the danger to contractors and force wages up even higher because fewer skilled Americans would be willing to work in Iraq.

"These people are non-combatants in a combat environment, but I am sure there are no studies about them." Figley adds. "Besides, it would be bad for business."

PTSD is bad for Baltazar as well.

"I wake up with nightmares, sometimes four times a night, sweating and yelling," he says.

It takes enormous courage to admit psychological baggage brought home from war, but for contractors back in the US it is necessary for recovery.

Taken for dead

Like Baltazar, another KBR employee, Samuel Walker, says KBR denied him medical leave after he was injured in the Camp Merez bombing. His only options at that point were to quit or stay in Iraq. Walker, who now lives in Augusta, Ga., worked for over a year in Iraq as a fitness and recreation supervisor at the camp. An Army veteran of 24 years, Walker joined KBR one month after retiring as a Combat Communications Specialist. He recalls that he was eating French fries when the explosion blasted through the mess tent.

"Body parts were flying all over and pieces of flesh flying in my face," Walker says.

When it was over, the former contractor was drenched in the blood of the victims around him and rescue workers took him for dead. "I was so close to the bomber," he adds. "There was copper wire from the bomb embedded in my jacket."

Walker took a full blast to the side of his head and shrapnel pitted his body. But when KBR medics treated him following the bombing, he says they merely rubbed Vaseline on his burns and gave him Motrin for pain.

"For two days I told them my side was hurting but they said I would be okay, and wouldn't give me medical leave," Walker says.

A week and a half later, like Baltazar, Walker quit and headed home to Houston. Now he complains of ringing in his ears and migraine headaches. He's in physical therapy for his neck, back and right knee. Walker also believes suffers from PTSD. Questions about his work in Iraq, scenes from the TV news, even French fries, all bring back the moment when the bomb flashed before him.

"I can't even walk into a restaurant without remembering the screaming, the hollering, the yelling and everyone thinking I was dead," Walker says. With the memories haunting him daily, Walker knows it's unlikely that he'll be able to re-enter the workforce. In the meantime, he's waiting on his claim for disability and medical bills.

"I haven't gotten one red cent from them," Walker says.

KBR responds

KBR insists that it is committed to ensuring its employees receive quality medical treatment.

"KBR employees work side-by-side with the troops, and they do the jobs that, here at home, are routine, such as planning and preparing meals," said KBR spokeswoman Cathy Gist. "In a war zone, however, these jobs require courage, resolve and skill."

When asked if employees had been denied medical leaves after being injured at Camp Merez, Gist answered indirectly. "As KBR's history of contracting for the U.S military in remote environments continues, the company remains committed to ensure[ing] its employees receive quality medical treatment and care, either locally or by means of evacuation to a more advanced medical facility as dictated by the nature of the situation, " she told CorpWatch,

Growing logjam

Like Baltazar and Walker, there are numerous former contractors waiting for insurance companies to resolve claims related to war zones.

"Insurance companies are not used to doing this sort of thing in the numbers they are coming in," says Washington, DC., attorney Mark Schaffer, who also represented a Merez bombing victim who received medical leave, but only after bickering with adjusters for three months. "Everyone is playing catch up."

Insurers are so behind that the pile-up has turned into a serious logjam within the Department of Labor, which is responsible for overseeing all DBA claims. Recently the department's administrative law judges, who preside over the most contentious claims, adopted a policy to expedite cases involving the war in Iraq and to pressure insurers to act more quickly.

Meanwhile, insurers are so behind that the pile-up of Iraq-related claims that there is now a serious logjam within the Department of Labor, which is responsible for overseeing all DBA claims. Recently the department's administrative law judges, who preside over the most contentious claims, adopted a policy to expedite cases involving the war in Iraq and to pressure insurers to act more quickly.

"We're starting to get more cases, absolutely," says Richard D. Mills, District Chief Judge for the Louisiana District Office, whose work includes claims from Houston, KBR's headquarters. "We have been asked to finish up on some cases within 45 to 60 days."

As of May 10, death and injury claims related to the war in Iraq total 2,919, according to the U.S. Department of Labor. Of those claims, insurers have disputed 1,538 -- more than half of the total -- and 821 remain unresolved.

These figures may not reflect the true number of workers eligible for benefits, because many don't know they may be covered, let alone the full extent of their benefits, says Schaffer.

"People are often stuck in Iraq, unaware of any entitlement," he observes, adding that the prospect of continuing work outside the United States also tempts employees to keep mum about their injuries. "Sometimes people are afraid to go to the doctor because they will get sent home," adds Schaffer. "And if you don't stay 330 days, you lose your tax free salary. Everyone is over there to make money and I haven't seen anyone turn down a paycheck yet."

Even U.S. citizens who have come home and families who have lost a husband or father are often unfamiliar with their insurance coverage, says attorney Pitts. The Houston lawyer represents 35 clients with claims against KBR's insurer, American International Group Inc. (AIG).

"AIG is dragging its heels and they only have three adjusters working the claims, so they are swamped," says Pitts.

A New York-based firm, AIG is widely involved with business in Iraq and is presently under investigation by the Securities and Exchange Commission for its accounting practices and for possible stock fraud.

Pitts is representing Baltazar and Walker and believes that their stories speak for themselves. "If anyone has a legitimate claim for post-traumatic stress and disability, it's these guys. They were picking flesh off themselves."

Pitts fights to get weekly compensation for as long as an employee is off work, medical bills and two-thirds of one's salary if a person is permanently out of work when everything medically possible has been done. Families that lose their primary income provider are also eligible for lifetime support as long as the surviving spouse does not remarry, leading Pitts to estimate that life-long disability claims for a widow and her family could top out at around $2 million.

"There's a lot of money to be saved by keeping people in the dark if you look at it as a pure numbers game," says Pitts who, in addition to specializing in DBA, is pursuing an ongoing international lawsuit against companies that helped Saddam Hussein produce sarin and mustard gas. Noting that very few attorneys specialize in DBA law because the fees are low and set by the Labor Department, he adds: "I am afraid there are a bunch of widows in the hinterland who don't even know what the DBA is, nor an attorney who practices it."

There are likely many workers around the world without knowledge about their insurance coverage. Tens of thousands of workers from India, Pakistan, Turkey, the Philippines and other countries have been recruited to work on military bases in Iraq to perform blue-collar jobs that include food preparation, sanitation, laundry services and construction work. They are often paid less than $1,000 a month and work largely for subcontractors under other subcontractors working for the prime U.S. funded contractor.

The General Accountability Office (GAO), the lead investigative arm of Congress, recently concluded that it is impossible to accurately estimate the total number of U.S. or foreign nationals working for U.S. government contracts in Iraq. The GAO's investigation was prompted by concerns in Congress about insurance costs that Iraq contractors are obligated to carry, which are then passed on to the government.

"It is difficult to aggregate reliable data on the cost of DBA insurance due in part to the large number of contractors and the multiple levels of subcontractors performing work in Iraq," the GAO reported. "Lacking reliable aggregate data, we were unable to calculate the total cost of DBA insurance to the government or the impact of DBA insurance costs on reconstruction activities in Iraq."

Responding to the GAO's report, Labor Department official Victoria A. Lipnic said that assuring all contracted employees have insurance coverage is an "impossibility" without having someone in Iraq to "actually demand to see proof of coverage for every level of subcontracted work."

In other words, the number of claims yet to come may be unfathomable. "The whole legal and factual situation is just like the wild west," Pitts offers.

Only the personal stories are tangible, but Baltazar and Walker say KBR has never called to find out how they are doing.

"I wanted to go back to work for them when I got well," Walker says. But he has since changed his mind. "I don't like the way I have been treated," he adds.

David Phinney is a journalist and broadcaster based in Washington, DC, whose work has appeared in The Los Angeles Times, New York Times and on ABC and PBS. He can be contacted at: phinneydavid@yahoo.com.